IGCSE, A Level Business Student Forum

07 Analyse reasons why higher productivity is important for a manufacturing business. [8]

[KN] Higher productivity means producing more units per unit of input, reducing average costs and improving competitiveness.
[KN] Increased productivity enhances a firm’s ability to meet rising customer demand without proportional increases in inputs (scarce resources), ensuring timely deliveries in competitive industries.

Possible Structure:
KN >> APP >> AN >> AN+
KN >> APP >> AN >> AN+

KN: Higher productivity means producing more units per unit of input.
APP:forexample a car factory that produces more vehicles with the same amount of labor and materials reduces the average cost per car.
AN:this allows the business to offer competitive prices compared to rivals.
AN+:as a result the company can attract more customers and increase market share.

KN: Increased productivity enables a firm to meet higher customer demand without proportionally increasing inputs.
APP:forinstance a smartphone manufacturer can produce more phones during peak seasons without hiring many extra workers.
AN:this ensures orders are fulfilled on time maintaining customer satisfaction.
AN+:consequently the business can retain loyal customers and strengthen its reputation.
MODERATOR COMMENT:
6/8
> IN AN MISSED ELEMENTS

KN: Higher productivity allows a business to make more products with the same resources, increasing revenue while controlling costs.
APP: For instance a car manufacturer producing more vehicles per day without hiring extra staff can sell more cars.
AN: This increases profit margins because the business earns more from the same level of input.
AN+: Consequently, the business can reinvest profits into research expansion or improving employee benefits, supporting long-term growth.

KN: Increased productivity generates extra resources and efficiency that can be reinvested into the business.
APP: For instance a factory that produces more smartphones per shift can use the savings to develop new models or adopt advanced technology.
AN: This helps the business stay competitive and adapt to changing market demands.
AN+: As a result higher productivity not only improves current performance but also supports innovation and long-term sustainability.
MODERATOR COMMENT:
>WRITE 2 MORE COMMENTS IN AN POINT
OVERALL WAS FINE
5/8

KN: If the production rate is higher then their are more chances of higher sales.
APP: For example if a furniture factory is manufacturing 40 chairs per week then their are chances of 30 being sold.
AN: Due to this they would be able to achieve economics of sale , therefore after lower prices to the customers, which increases their customer base, they will be able to earn more revenue .
AN+: Therefore the final profit will also increase.
KN2: More productivity leads to more sales, therefore higher market share is achieved.
APP: If the factory is selling 40 chairs out of 100 every week their market share will increase.
AN: Due to this their brand image may improve and they may become market leaders, which will grant them a competitive edge, making them the price setters of that market. Therefore, they may charge higher prices from the customers.
AN+: The revenue generated from this can be reinvested in the business the expand/grow like opening up a new factory.
MODERATOR COMMENT:
8/8

[KN]Higher productivity leads towards lower average costs of production.
[APP]For example, in a car manufacturing company like toyota, using advanced technology allows more cars to be produced with fewer workers.
[AN]This can increase profits for the business by keeping prices the same or lower to attract customers while maintaining profit margins. This improves its competitiveness in the market,
[AN+]Overtime, these cost savings can be reinvested into research, staff training etc which can further boost efficiency and innovation. This can also help the business to maintain a strong market position which can result in a higher market share.
[KN]Higher productivity also enables a business to meet customer demand more effectively.
[APP]For example, a furniture manufacturer that improves worker efficiency can produce and deliver orders faster, hence satisfying customers.
[AN]This can lead towards repeat purchases hence building a strong reputation of reliability and a positive word of mouth promotion hence higher sales.
[AN+]In the long term, consistent customer loyalty and a strong brand image can help the business expand its market share and achieve steady growth, giving it an advantages over competitors who struggle to meet deadlines or maintain quality.
MODERATOR COMMENT :
>CLEAR YOUR CONCEPT B/W AN AND AN+ IN AN YOU HAVE TO WRITE 3 ELEMENTS AND IN AN + YOUR WRITE ONE MORE ELEMENT
4/8

Point 1: Higher productivity reduces cost per unit

(KN)
Higher productivity means producing more goods using the same amount of resources. This helps reduce the cost per unit, as the total production cost is spread over more items.

(APP)
For example, in a car manufacturing company like Toyota, if workers and machines become more efficient, they can produce more cars in less time without adding extra costs like wages or materials.

(AN)
Firstly, this means each car becomes cheaper to make.
Secondly, the business can earn more profit on every unit sold or offer lower prices to attract more customers.
Thirdly, higher profits give Toyota extra money to invest in better technology or training, which can further improve efficiency.
MODERATOR COMMENT:
> 8/8 GOOD ATTEMPT

(AN+)
As a result, Toyota can stay competitive in the global car market, increase its profit margins, and maintain stable growth over time because it is producing at a lower cost while keeping quality consistent.

Point 2: Higher productivity helps meet demand faster and maintain product quality

(KN)
Another reason higher productivity is important is that it allows the business to meet growing customer demand quickly while keeping product quality high.

(APP)
For instance, when Toyota faces high demand for a new car model, increased productivity ensures cars are made quickly and efficiently without lowering standards. The company can use automated machinery and skilled labour to speed up production while checking quality at each stage.

(AN)
Firstly, this helps Toyota avoid product shortages and delays in delivery.
Secondly, maintaining quality keeps customers satisfied and protects the company’s reputation.
Thirdly, quick delivery and consistent quality encourage customer loyalty and repeat purchases.

(AN+)
In the long run, this allows Toyota to build a strong brand image, meet global demand efficiently, and keep a loyal customer base. Meeting demand on time while maintaining high standards ensures steady sales and longterm success.

[KN]] Because it reduces cost per unit.
[APP] For example at car factory each worker makes more car per shift so the firm can produce extra vehicles to sell without hiring more staff.
[AN] Hence this increases sales which results in generating more profit. It improves brands image.
[AN+] Furthermore it would create customer loyalty.

[KN] Because it improves worker skills and efficiency.
[APP] For example, if workers are trained to use machines properly, they can make cars faster and with fewer mistakes.
[AN] Hence this reduces waste, improves quality, and increases the number of cars produced per shift.
[AN+] As a result, the business can sell more vehicles, strengthen its reputation, and gain customer loyalty.
MODERATOR COMMENT:
>MISSED 1 ELEMENT IN KN 1
7/8 OVERALL WAS GOOD

[KN] High productivity leads to lower COP per unit.
[APP] For example, a toy manufacturer produces more units per hour, enabling it to reduce the prices of its products as the COP falls.
[AN] This makes the business more competitive, as lower prices will attract more customers, increasing sales of the business.
[AN+] Furthermore, lower prices and sustained quality lead to good word of mouth, increasing the consumer base of the business and its brand image.

[KN] Higher productivity allows timely deliveries.
[APP] This helps the toy manufacturer deliver orders to customers on time, increasing customer satisfaction.
[AN] A rise in customer satisfaction leads to repeat purchases, making customers loyal to the business in the long run.
[AN+] This helps increase the market share of the business as competitors may fail to attract customers, helping the business achieve its objective of high market shares.
MODERATOR COMMENT :
>4/8
>YOU WRITE SAME POINTS IN KN 1 AND KN 2

KN: Higher productivity means more goods are produced in less time, increasing efficiency.
AP: For example, a car manufacturing plant using advanced machinery can produce more cars per day than a plant relying only on manual labour.
AN: More output is achieved because machines complete tasks faster. Costs per unit drop as resources are used more efficiently. Meeting targets becomes easier, keeping the business competitive.
AN+: Higher productivity allows the business to meet customer demand on time. It also increases profit by producing more with the same resources.

KN: Higher productivity helps a manufacturing business reduce costs and remain competitive.
AP: For example, a textile factory that increases its workflow can produce more clothes using the same amount of fabric.
AN: Costs are lower because less time and materials are wasted. The business can offer competitive prices, attracting more customers. Profitability improves as efficiency increases.
AN+: Reduced costs make it easier to invest in new technology or expand production. Efficient operations strengthen the business’s position in the market.
MODERATOR COMMENT :
> REWRITE YOUR KN 1 AGAIN
>KN 2: WRITE APP AGAIN
2/8

(K) It means more output per input,lowers average cost. (App)clothes making firm trains it's employees- now 10 clothes sewn per minute compared to old-obviously average cost(per unit cost) lower.(an) leads to freed up resources for other uses- leads to ease in competitive war- leads higher market share-leads to reinvesting for economic benefits.
(K)it means easier to cope with increase consumer demand at times.(app) same above-the firm notices a specific brand coth demanded highly- copes up with it- has 10 per minutes.(An) leads to increased customer Base, leads to increase market share, leads reinvesting against competitive rivalry enabling greater market share.
MODERATOR COMMENT:
>4/8

[KN] Higher productivity means producing more output with the same resources.
[APP] For example, a phone-manufacturing company makes more units per worker per day.
[AN] This reduces the cost per unit because the same wages and machinery create more finished products.
[AN+] Lower costs allow the business to increase profit margins or lower prices to beat competitors.

[KN] Higher productivity helps the business meet demand faster.
[APP] For example, a furniture factory can complete large orders more quickly.
[AN] This prevents delays, keeps customers satisfied, and avoids losing orders to rival companies.
[AN+] In the long run, it strengthens the business’s market reputation and brings repeat customers.
MODERATOR COMMENT:
KN 1: IN APP MISSED ELEMENTS AND ALSO GIVE ANOTHER EXAMPLE
KN 2 : IT WAS FINE
5/8

[KN] Higher productivity means producing more units per unit of input, which reduces average costs and improves competitiveness.
[APP] such as a bakery producing more cakes per day with the same number of staff and ingredients.
[AN] hence, the bakery can lower costs, increase output, and sell more products.
[AN+] this allows the bakery to make higher profits and stay ahead of competitors.

[KN] Increased productivity also helps a business meet rising customer demand without increasing resources.
[APP] such as the same bakery handling large orders during holidays without hiring extra staff or buying more equipment.
[AN] hence, the bakery can deliver orders on time, maintain quality, and serve more customers.
[AN+] this strengthens the bakery’s reputation, builds customer loyalty, and supports business growth.

(a bakery is a manufacturing business. ;-;)
MODERATOR COMMENT:
>7/8

[KN] Higher productivity means higher output.
[APP] For example, a furniture manufacturer with high productivity can complete and deliver customer orders more quickly. This leads to increased customer satisfaction and loyalty.
[AN] As a result, repeated sales improve brand image and give the firm a competitive advantage.
[AN+] Additionally, a positive reputation attracts new customers. This solidifies the business's market position and ensures long-term success.

[KN] Higher productivity results in a lower cost of production.
[APP] For instance, a car manufacturer that uses new assembly line technology can produce more vehicles in a certain time frame. This increases output without significantly raising input costs.
[AN] This cost reduction allows the business to lower prices, which attracts more customers and increases market share, or to keep prices the same and increase profit margins. The efficiency gains also free up resources for other strategic initiatives.
[AN+] In the long run, sustained cost advantages let the company invest in innovation, employee training, and expansion. This strengthens its competitive position and ensures long-term sustainability within the industry.
MODERATOR COMMENT:
4/8

[KN] Higher productivity means more output is produced per worker reducing the average cost of production.
[APP] a car manufacturing business producing 200 cars per day instead of 150 using the same number of workers.
[AN & AN+] This reduces the cost per unit allowing the business to sell products at more competitive prices. Lower prices may attract more customers increasing sales and market share. Alternatively, the business could keep prices the same and enjoy higher profit margins.
2.
[KN] Higher productivity allows the business to produce goods more efficiently.
[APP] A phone-manufacturing business competing with global brands like Samsung or Xiaomi.
[AN & APP] When productivity rises the business can meet customer orders more quickly improving customer satisfaction It can also adjust output faster if demand increases reducing the risk of losing customers to competitors Faster production can also support innovation as the business frees up time and resources to develop new products.
MODERATOR COMMENT:
6/8

kn] higher productivity in business mean producing more with less resources efficiently so productivity is important for manufacturing business because this reduces the cost of production with high output production and increases the profit of the firm in return
ap] for e.g a car manufacture company produces 10 cars in a day from 12 with the same labour expense and other operations so this margin will be their productivity
an] this will increase the profit margin of the firm and will also enough profit would be generated to expand the business operations of the business with that extra profit
kn2] because manufacturing business needs to fulfill consumer demands in the market so higher productivity will fulfill consumer demand and met the market needs by this step
ap] for e.g. high productivity business like shoe manufacture business will make the consumer demands fulfill by producing more the market demand more customers will be attracted to them as can also offer low prices to the customer as productivity decrease the expense and increase the production rate making the customer loyal
MODERATOR COMMENT:
>4/8
>YOU MISSED ELEMENTS IN AN AND ASLO MISSED AN+ POINT IN THIS